Affiliate marketing allows advertisers to reach new niche audiences across the web and increase revenue at scale. According to a report by the Performance Marketing Association, affiliate marketing has the power to achieve an impressive average return on ad spend (ROAS) of 12:1.
So why don't more advertisers take advantage of the many benefits of affiliate marketing?
Investments in affiliate marketing drove U.S. e-commerce sales to $71 billion in 2021, according to the report. Also, spending increased by 47% from 2018 to 2021. However, according to an eMarketer survey, 28% of marketers are still concerned about the impact affiliate marketing has on their revenue.
So how can more advertisers grow their affiliate marketing businesses, overcome common challenges, and improve performance results?
That's where this guide comes in.
Here we detail effective growth strategies and solutions for long-term success in affiliate marketing.
Affiliate Marketing Overview
Affiliate marketing is the process of partnering with publishers to promote their products and drive leads and sales. Affiliate links can be shared across a variety of publisher properties, including websites, email newsletters, social media channels, and blogs.
For example, a sportswear retailer might partner with sports and fitness blogs to include product links within their posts. Every time a reader clicks on a promoted link or goes on to make a purchase, the publisher earns a commission. And advertisers naturally get qualified leads.
Understand affiliate marketing
It is important to understand the different elements of the affiliate marketing model. For example, an affiliate marketing strategy involves four major players:
- Advertiser. A business or person seeking to sell a product or service.
- Publisher/Affiliate. A company or individual offering to promote its products or services to an audience.
- platform. Tools that automatically connect advertisers and publishers to find the right ad placements and optimize results. Learn more about affiliate marketing tools for beginners.
- customer. People who consume the publisher's content, engage with affiliate advertising, and ideally purchase the promoted products.
Affiliate marketing has many potential benefits for advertisers, including:
- Improved performance. Affiliate marketing models are performance-based. So the end goal is not just to increase awareness, but to generate leads and sales. Also, depending on the terms of the partnership, advertisers only pay if the publisher is able to deliver a click or purchase.
- The range has been expanded. Advertisers can leverage existing audiences from established publishers rather than building their own customer base from scratch.
- Improved reliability and dependability. By partnering with trusted publishers, advertisers can increase their credibility and begin building long-term customer relationships. The IAB calls this the “news trust halo” effect. They found that after consumers saw an ad for a brand in their favorite news outlet, they were 45% more likely to visit that brand's website.
Growth strategy for expanding affiliate marketing business
When you start affiliate marketing, you may partner with several publisher sites in your area of expertise. However, it is important to grow your affiliate marketing business to expand your reach, increase your visibility, and continue to increase your sales.
To that end, let’s break down the main affiliate marketing techniques to boost your growth.
Diversifying affiliate programs
There are multiple affiliate networks and programs to choose from, including ClickBank and Perform.[cb]. Each program offers unique targeting features, publisher partners, and niche audiences. So, if your affiliate results have plateaued, diversify your affiliate program to expand your reach.
For example, you can use niche affiliate programs to increase visibility among a specific customer community. Alternatively, you can use a more expansive affiliate network to cast a wider net and optimize your targeting to suit your needs.
Expanding product or service offerings
Maybe the market is saturated with one or two best-selling products. You can now try to expand your product offering and create campaigns for additional products in your portfolio.
Not sure which products to promote? Conduct market research to assess customer demand and identify key trends. Also, build strategic partnerships with publishers within your industry and ask them what kind of content their readers are most interested in.
Expanding geographic scope
The real estate agent's mantra is “location, location, location.” ” For affiliate advertisers, this means if you have exhausted a particular market, try targeting international markets using geo-targeting tools. For example, you can add international shipping quotes to your e-commerce pages and reach users around the world with your ads.
Don't forget to research each market's unique language, cultural barriers, and pain points in advance. This allows you to adapt your local marketing strategy accordingly and cater to each audience's specific needs and preferences.
Challenges in growing your affiliate marketing business
Affiliate marketing is easy to set up with the right tools and strategies. However, it's important to be prepared for certain challenges when scaling your campaigns and optimizing your results.
Some notable affiliate marketing challenges include:
Affiliate relationship management
Managing affiliate relationships can be difficult. But if done correctly, it can create a win-win situation for both advertisers and publishers.
Be sure to set transparent terms and expectations with your partner upfront. For example, determine a fee structure that is fair for both parties. Decide clearly how long each ad will run. Decide on distribution channels such as blogs, websites, and social platforms. We also keep communication open and continue to build strong partnerships throughout the campaign.
Maintaining compliance and regulatory standards
The Federal Trade Commission (FTC) sets compliance rules and regulations regarding affiliate marketing. It is important that advertisers and publishers adhere to these FTC guidelines in their campaigns. For example, the FTC requires affiliate publishers and retailers to clearly disclose their relationship with readers with a disclaimer such as “I receive commissions for purchases made through links in this post.” states that there is.
Advertisers and publishers must also comply with data privacy laws set forth by the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) to protect customer information.
Performance tracking and analysis
Implement a robust tracking and reporting system to analyze ROI in real time. For example, you may want to track impressions, click-through rates, leads, and sales. You should also keep an eye on your spending using metrics like cost-per-click and cost-per-conversion.
Publisher partners and affiliate networks must provide these analytics so you can continue to track performance while your campaigns are running. With this information at your fingertips, you can make data-driven decisions to optimize your campaigns and improve results.
Learn more about how to measure your content marketing ROI using key metrics.
compete in a crowded market
Customers have an almost endless supply of organic and promotional content to consume on the web. So what makes your brand and product different? And what steps can you take to compete in such a crowded market?
Start by identifying your unique selling proposition (USP). A USP is a feature that really communicates your value and helps your brand stand out from the competition. For example, your product may be handmade and of high quality. Maybe they offer affordable pricing and great customer service. Or maybe your business is popular locally and has had a long-standing presence in your community.
Whatever your USP is, incorporate it into your affiliate campaigns and landing pages. And communicate them clearly throughout the customer journey to ensure they stay noticed.
Grow your affiliate marketing business with Taboola
As affiliate marketing grows in popularity, advertisers need the right strategies to stay ahead of the game and scale their campaigns.
That's where Taboola comes in handy. His Taboola, the leading content recommendation platform, offers a massive global reach of 500 million daily active users on over 9,000 premium sites. Taboola is also the exclusive native advertising partner for all of Yahoo's digital properties, reaching approximately 900 million monthly active users worldwide across key verticals.
As ClickBank discovered, Taboola has driven double-digit growth across affiliate verticals, including health and fitness, online education, and finance. Most importantly, it provides tools that help you reach the right customers with content that matches their interests. So you can confidently navigate the affiliate landscape and continue to drive results.
Ready to scale your campaigns across the open web? Learn more about affiliate marketing with Taboola.
