wondering What Is Affiliate Marketing ? in this Affiliate Marketing For Dummies guide i will show you the basic of affiliate marketing
Imagine waking up … naturally … when your body tells you. Your “commute” is to put on some clothes (optional) and walk a few feet to your laptop. You log in to a website that shows you have earned hundreds, if not thousands of dollars in one night. How is it possible? This is the life I have lived for ten years. Keep reading, and I will show you how.
We are in 2019. It seems that the Internet enriches everyone. You hear about YouTubers realizing seven digits a year. Another 20-year-old nerd makes $ 1 billion from a startup.
You wonder … “How can I have a share of the action?” I want to talk about a hidden industry called affiliate marketing. Have you noticed banner ads every time you browse a website? Yes, I know, sometimes they can be a bit boring.
But have you ever wondered what’s going on behind the scenes? Chances are an affiliate marketer is behind all this.
Here is the big picture of what an affiliate marketer does:
- We buy banner space on websites using our own money.
- We create a website that promotes the product or service of another company.
- The company pays us a commission each time we make a sale.
- We keep the difference between the commission and the amount we pay for the banner space.
Affiliate marketers help businesses acquire customers and receive a commission for each referral.
There are thousands of business models online. See why affiliate marketing is amazing:
- You have no inventory. No need to keep boxes in the corner of your garage.
- You do not need to sign a contract. If you do not want to work with a company anymore? Just stop.
- You do not have to deal with customers.
- You are not restricted to a place of work.
- It’s great if you’re introverted because everything is done behind your laptop. You do not have to attend meetings with clients, conferences, or make yourself known if you do not want to.
- You can make a lot of money. Generate 4-5 profit figures+ a day is not uncommon.
You focus only on marketing. The affiliate marketing world is full of opportunities, and it is not too late to get a share.
Before you start, you can visit http://nickaffiliatebootcamp.com to access our free training.
WHAT DOES AFFILIATE MARKETING MEAN?
Affiliate marketing can be described as a process by which an affiliate receives a commission for marketing products from another person or company. The affiliate looks for a product he likes, then promotes it and earns a portion of the profit from each sale he makes. Sales are tracked through affiliate links from one site to another.
WHO IS INVOLVED IN AFFILIATE MARKETING?
Five parties are involved in a typical affiliate campaign.
1. The subsidiary also is known as “publisher.”
It’s you. You are the intermediary. You are the middleman who connects the customer to the product or service. You create a marketing funnel that includes ads, landing pages, and any other means necessary to persuade the buyer to sign up or make a purchase.
Your job is:
• Find products to promote (offers)
• Find potential customers (traffic sources)
• Create marketing materials (landing pages, ads, etc.)
• Optimize (test several parts of the campaign) until it becomes profitable
2. The affiliate network
Affiliate networks (often called “networks”) are “marketplaces” for offers. The offers refer to the “products” or “services” that companies are trying to sell. The networks serve as intermediaries between the subsidiaries and the owner of the product/service. You can sign up with an affiliate network and find hundreds (sometimes thousands) of offers to promote.
A typical affiliate network will have offers on various sectors, including:
- Weight loss products
- And hundreds of more verticals…
When you join an affiliate network, you get an “affiliate manager” (commonly called “AM”). This is your contact person. Their job is to help you solve your campaign problems and recommend new offers to market. Affiliate networks are optional. You can always work directly with the merchant or advertiser. Sometimes they have their internal affiliate program with which you can register directly. But it’s easier to access an affiliate network when you’re starting.
3. The advertiser
This is the firm that owns the offer. Every business has a marketing team, but affiliate marketing is one way to get more low-risk sales. The advertiser pays only when the affiliate submits a conversion. I know companies that do not have a marketing department and have wholly-owned sales subsidiaries. They focus on their strengths and outsource marketing to people like us.
4. The origin of the traffic
That’s where your potential customers come from. You create a website that advertises your products … you need a way to get people to visit your website. Most websites sell “ads” on their websites.
How do you think Facebook and Google support each other?
There are two types of traffic sources.
• Direct – You can buy banners directly from the site itself. Example: Buy directly from Facebook.com.
• Advertising Network – is a “market” for many different sites. It would make no sense for a smaller blog to deal with advertisers every day, so they work with a network. Example: Taboola is a complete network of individual sites.
5. The customer
It is the person who ultimately purchases the product or service from you. Your job is to understand the customer and convince him to convert.
Remember, your job is to improve their lives. An ultimate affiliate marketer is a person who can create a win/win situation for all involved parties. You make a profit. Traffic source, affiliate network, and advertiser make money. And the customer connects to a product or service that is beneficial to him.
How does all this work at the technological level? How does the advertiser know who has to pay? Do not worry too much about it. We are in 2019, and the tracking technology is sophisticated but easy to use.
WHY AFFILIATE MARKETING IS A WIN-WIN SCENARIO
People who have never tried affiliate marketing may think it is too easy or too difficult for it to work. Some even think that only the wealthy become rich and that all the others will not be able to earn more than a few dollars a month.
It depends on what you are trying to accomplish. One truth that I would like to point out is this: Affiliate marketing is not easy money, and you will not become rich overnight.
There is money to be generated in affiliate marketing, but whether you will benefit or not will depend on many factors such as engagement, experience, web site traffic, etc.
Here we will learn how to calculate your earnings, how to make affiliate marketing work for you, as well as the types of payment terms used by most affiliate programs, and why affiliate marketing is the best win-win scenario.
How are affiliate marketers paid?
An inexpensive and quick way to make money without having to worry about selling a product, affiliate marketing has an undeniable appeal for those looking to increase their online income. But how is an affiliate paid after linking the seller to the consumer? The answer is complicated. The consumer does not always have to buy the product for the affiliate to receive a kickback. The affiliate’s contribution to the merchant’s sales will be measured differently depending on the program. The affiliate can be paid in several ways:
1. Pay per sale.
This is the default marketing framework for affiliates. Under this program, the merchant pays the affiliate a percentage of the selling price of the product after the consumer has purchased the product because of the affiliate’s marketing strategies. In other words, the affiliate must ensure that the investor invests in the product before being compensated.
2. Pay per lead.
Pay per lead affiliate programs, which is a more complex system compensates the affiliate based on how well the leads convert. The affiliate must persuade the buyer to visit the merchant’s website and carry out the desired action, either by persuading them to fill out a contact form, subscribing to a product trial, subscribing to a newsletter or downloading a product. Software or files.
3. Pay per click.
This program encourages affiliate to redirect consumers from their marketing platform to the merchant’s website. This means that the affiliate must involve the consumer as it will be transferred from the affiliate’s site to the merchant’s site. The affiliate is paid according to the increase in web traffic.
Do I have to learn math even if I do not have a website yet?
If you have not registered for an affiliate program, you may find that you do not need to learn how everything works.
Remember that affiliate marketing will only work if you are willing to research and treat it like a real business. Real companies make projections before they even have a product. If you want to set concrete and achievable goals (and reach them), you need to become familiar with the metrics. Paraphrasing Peter Drucker: What is measured is managed.
Learning how to protect your affiliate revenue allows you to create a sustainable marketing strategy.
Terms and metrics to know
1. Commission Rate – A trader will set a specific commission rate for his products. This is the portion of the income you receive as an affiliate. Commission rates can range from one figure to more than 50%. In general, digital products (such as eBooks and software) generate the highest commissions, while physical products have the lowest value.
2. Clickthrough Rate (CTR) – Number of clicks your link gets divided by the number of times they were viewed (impressions).
3. Earning Per 100 clicks (EPC) – Sometimes called EPHC, this indicator gives you an idea of what other affiliates are earning with this program. Although it must never be used as the sole criterion for evaluating the profitability of a program, it is always good to analyze it.
4. Average Order Value (AOV) – This is the sum of all orders divided by the number of orders. This is a useful measure for predicting your sales.
5. Reversal Rate (RR) – Percentage of transactions reversed by the merchant. Some affiliate programs may not provide this data before registration, but some networks (such as ShareASale) provide this data for you to review.
6. Conversion Rate (CR) – Conversion Rate is the most interesting to follow. Depending on the program, it may be a click-to-sale CR or a click-to-lead CR. The conversion rate is calculated based on the number of visitors who clicked on the site offering the product/service and made a successful (or converted) purchase.
Suppose you are a blogger with about 10,000 pages view each month. And let’s say you choose a merchant who pays a 30% commission on sales. For our calculations, we also assume the following values for each metric:
CTR = 5%
EPC = $ 250
AOV = $ 125
CR = 10%
RR = 10%
We can calculate traffic, sales, and revenue using the following formulas:
10,000 * 5% (CTR) = 500 clicks
500 * 10% (CR) = 50 sales
50 sales-10% (RR) = 45 sales
45 * $ 125 (AOV) = $ 5625
$ 5625 * 30% (Commission) = $ 1687.50
To get your custom EPC, you can use the following formula:
$ 1687.50 (revenue) / 500 (traffic) * 100 = $ 337.50
As you can see, your personalized CPE is not so far from the actual CPE of the program, which was set at $ 250.
NOTE: The above formulas may differ from one trader to another. Do not assume that these projections will apply to all affiliate programs, so take the time to do your research.
Why is Affiliate Marketing Good for Merchants?
Companies would not continue to have affiliate programs if they did not make money. To get an idea of how merchants are also earning affiliate marketing, check out the formula below:
Revenue-Cost-Affiliate Commission Payment = Profit
Revenues can be considered as gross income or as the highest figure at which costs must still be subtracted.
The cost includes everything the company spends on the market and manufactures the product (which may include other companies’ expenses).
Affiliate payment is the commission that affiliate marketers, like you, pay. Since you, as an affiliate marketer, promote the product for the company, the marketer does not have to spend so much money on marketing to get that sale – that’s why he pays the commission.
See an example scenario. Suppose the following values:
Income: $ 199
Cost: $ 40
Affiliate payment: $ 59.70 (30%)
And by entering these values into the formula, we get the trader’s profit or net profit.
$ 199 – $ 40 – $ 59.70 = $ 99.30 profit per sale
$ 99.30 is still a big margin for the company, while the commission of $ 59.70 (30%) may seem like a lot, it’s probably similar to or less than they pay to acquire a customer through your marketing channels.
Marketers have the potential to earn more through affiliate programs because, as I just shared with you, they earn without the cost of marketing.
Of course, they will still have to run marketing campaigns alongside their products/services to make themselves known, but their profits would be significantly reduced if they did not have affiliate programs.
It’s the best win-win scenario
Affiliate marketing is a strategy that benefits you and the marketing agent. This has turned many Joes and Janes into millionaires and has helped small and large businesses grow.
And now that you know how the math works, you should have the confidence you need to trust this strategy and be able to earn millions of dollars in the future!
How to Promote Affiliate Marketing Product
- Solo ads – you can choose to drive highly targeted ads from solo ads
- Start blogging building a blog is also a good way to drive highly targeted traffic to your site
- build a funnel – you should also build a funnel to build your email list, I highly recommend clickfunnels which is a really powerful software to build a list and make money with it, you can read this Clickfunnels review and learn about Clickfunnels price, you can also check funnel hacks and funnel builder secrets for the best clickfunnels discount
- email marketing.
Why You Should Build A Funnel
a funnel is the ultimate way to do affiliate marketing, if you want to build one, Clickfunnels is a really powerful software for building funnels, can read this Clickfunnels review and learn about Clickfunnels price, you can also check funnel hacks and funnel builder secrets for the best clickfunnels special offer to learn more about this tool
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