Affiliate marketing. Even if you’re not currently doing it yourself, you’ve likely heard about it. It’s an effective and dynamic model that allows brands to enhance their influence, expand their reach, boost their return on investment and elevate their voice by strategically collaborating on a performance basis with outside individuals or companies. But with that said, what is it, and how does it work?
At Acceleration Partners, we specialize in developing and refining affiliate partnership strategies to drive growth and achieve your business goals. Our experts provide you with the insights on everything you need to know about affiliate marketing—including what it is, how it works, and (most importantly) why it works.
How can you set your brand up for success? Read on to learn more about affiliate marketing basics, plus everything you need to know to kick off successful affiliate marketing programs.
At its simplest, affiliate marketing — also known as partnership marketing — is an advertising partnership between a brand and a publisher. The brand provides a product or service, which the publisher then promotes. Publishers earn commissions on conversions — such as sales, leads, clicks or referrals — in exchange for promoting the product or service.
Affiliate marketing focuses on collaborating with individuals or organizations that are willing to endorse and recommend the brand’s offerings to their own audience or platform. Once affiliates have been identified, concrete agreements are established with them (including conditions for payment) to formalize their involvement in the affiliate marketing process.
Affiliates can range from bloggers to content creators, traditional media sources, deal or review sites or even other brands. Affiliate publishing partners may earn commissions based on pay-per-sale, pay-per-click and pay-per-lead models.
When intentionally set up and effectively managed, this marketing model can significantly impact a business’s online revenue stream. With its high returns on investment and cost-effective customer acquisition, affiliate marketing emerges as a valuable asset in the digital marketing toolkit, contributing to long-term success and growth. Plus, digital and affiliate marketing programs are extremely customizable and well-suited for virtually all generations of consumers.
So whether you want to partner with a lifestyle blogger to promote the release of a new, sustainable kitchenware line or you’re a tech brand looking to partner with a publication to advertise a new product or software platform, affiliate marketing partnerships can open the door to new audiences, boosted sales and greater brand awareness.
One key feature — and a major attraction — of affiliate marketing is that it is inherently outcome-driven. Businesses only incur costs when specific goals are successfully achieved, and affiliates who promote the brand’s products or services only receive compensation when they accomplish the objectives that they set out to achieve.
This performance-based approach fosters a sense of accountability and motivates both parties to work towards their mutual benefit. The model’s incentive structure hinges upon tangible, measurable wins.
This arrangement benefits both parties; businesses can expand their reach and increase sales through the diverse marketing efforts of affiliates, while affiliates can monetize their online presence and earn passive income by promoting products or services that align with their audience’s interests.
Take a look at how some common types of partnerships work within an affiliate marketing program:
To maximize success and return on investment (ROI) in affiliate marketing programs, it’s helpful to keep a few best practices and smart strategies in mind:
By following these guidelines, you can enhance your affiliate marketing program’s effectiveness and achieve long-term success and increased ROI.
Lots of different businesses across a wide variety of industries find success using affiliate marketing to enhance their marketing efforts and reach a broader audience.
The model is so versatile that it can be employed by essentially any business with a large enough interested consumer base. It is used by a wide variety of companies including, but not limited to:
The flexibility offered by affiliate marketing makes it a popular choice for businesses of all sizes, from startups to well-established enterprises, seeking to tap into the power of collaboration to achieve their growth objectives.
Want to see how affiliate marketing is used by businesses across several major industries? Check out some of our detailed use cases showing the effectiveness of affiliate marketing, including our library of client case studies and testimonials.
A successful affiliate marketing partnership relies on teamwork, audience and goal alignment and effective communication.
So, who are the key players in an affiliate marketing model and how do they work together to create a successful partnership?
At the core are the brands or merchants offering products or services to promote. Affiliates, such as bloggers, content creators, social media influencers and website owners, partner with the brands to promote their offerings to their respective audiences.
Affiliate technology platforms act as intermediaries, providing a platform where brands can connect with a wide range of affiliates. They offer solutions for tracking, reporting and commission payments.
Overseeing and managing the day-to-day operations and strategy of a program on behalf of brands is where affiliate program management agencies can come into play. They work directly with affiliates and the affiliate network or SaaS platform that services the technological needs of the program.
Finally, the consumers play a crucial role as they engage with the affiliates’ promotional content and make purchases, completing the conversion cycle.
This collaborative network ensures that each player benefits from the system, leading to a win-win situation for all parties involved.
Learn more about traditional affiliate marketing and how it works with this helpful 101 guide. It’s perfect for newcomers to partnership marketing or those looking to learn how traditional affiliate partnerships could help your brand achieve more.
There are many types of affiliate marketing partners encompassing a wide array of individuals, organizations, and online platforms that can help businesses amplify their reach and drive desired outcomes.
By leveraging the following classifications of partnerships strategically, businesses can unlock new avenues for growth and revenue generation.
Affinity groups deliver focused offers and content to a wide range of specific, highly-targeted affinity groups, such as students, health workers, military, seniors and more. This is done through a closed network that can only be accessed by the affinity group and reduces the risk of leaked promotions.
A brand-to-brand partnership is a marketing strategy between two noncompeting brands that leverage each other’s customer base and reach. Campaigns can include social media competitions, on-site placements, newsletter features, or co-branded products.
A card-linked offer (CLO) affiliate provides targeted offers based on customer purchasing behavior. Users receive bonus points, cashback, or statement credits when they use their enrolled card for qualifying purchases. Initially, CLOs were mainly associated with restaurants and local businesses, but now e-commerce ranks as the third-largest CLO merchant category—which is why so many brands have started to explore card-linked offer affiliate partnerships.
Content affiliates, such as bloggers, product review sites, and social media influencers, create valuable and relevant content to share with their audience. Brands partner with content affiliates to promote their products and services to a loyal and engaged audience. This collaboration includes customized content, product reviews, sponsored posts, newsletters, and promotion through various social media channels like Instagram, YouTube, Facebook, and Pinterest.
Coupon sites are large companies aiming to cover every available discount and promotion through digital coupons, including percentage off orders, free delivery, and gifts with purchases. Brands partner with coupon affiliates to showcase deals, boost website traffic, and increase on-site conversions. The collaboration offers easy integration, raises average order value with threshold offers, and enhances brand awareness through SEO rankings and a loyal user base.
Deal affiliates blend elements of coupon and content affiliates. They curate content featuring highly discounted products and “Best of Web” prices for their consumer base. Brands collaborate with deal affiliates for efficient and effective promotion of their offers and products. Deal affiliates possess loyal users who frequently visit their site for the latest incentives, resulting in valuable traffic directed to the brand’s website.
Email or newsletter affiliates send marketing emails on behalf of the brand. They have their own mailing lists or work with partners who own mailing lists. Brands partner with them for highly customized emails and access to influential audiences based on historical data.
Influencer partnerships play a vital role in a brand’s marketing mix, offering top-of-funnel brand exposure, compelling content to use across paid and owned channels, and influence over follower purchases. Through their relatability and niche audiences, influencers can develop strong brand relationships founded on trust and authenticity.
Influencer networks provide brands with access to a vast pool of vetted influencers. These companies offer a range of resources and data, allowing brands to scale quickly compared to individual influencer partnerships. Working with an influencer network or agency grants brands access to thousands of influencers, making it an efficient and data-driven approach to influencer marketing.
Lead generation partners encompass various types of affiliates, such as content affiliates, affiliate networks, and product review sites. They use channels like email, display, and push notifications, among others. Brands collaborate with lead generation affiliates to generate valuable leads and motivate their target audience to complete desired actions, like applications, email signups, subscriptions, or sales.
Loyalty affiliates incentivize consumers with rewards for desired actions, often sales. These actions may involve accepting free trial offers, subscribing to a service, and more. The rewards they offer vary, including cashback, redeemable points, airline miles, education fund accounts, and charitable contributions.
Mass media publishers are reputable online and offline publications and media companies with highly engaged audiences. Brands partner with them to acquire new customers and boost revenue. Mass media affiliates are sought-after opportunities for brands because they can reach consumers at every stage of the marketing funnel and effectively bridge the gap from discovery to purchase.
Mobile affiliate partnerships include a variety of collaborators, such as mobile networks, affiliates with mobile apps, and mobile measurement and attribution providers. These partners can be compensated in a variety of ways, such as commission, cost-per-installs, applications and linked payments.
These types of partners give advertisers—who might not have a formal registry—the ability for their products to be included in online registries for people celebrating life events. Registry spans weddings, babies, and other significant life events such as birthdays, buying a new home, and graduations.
Review affiliates are editorially-focused websites dedicated to providing insightful and unbiased reviews for a wide range of products and services. Brands find value in partnering with them due to their reputation for trusted and organic content creation, offering informative resources that help consumers make well-informed decisions.
Search affiliates bid on branded, trademark plus terms, or nonbranded keywords to drive traffic to a brand’s website, block competitors/unauthorized bidders, and increase exposure.
Shopping comparison affiliates, also called price comparison affiliates in Europe, are shopping engines that let consumers search for products by category, price, brand, color, or discount. They provide thousands of results from different brands, directing users to complete transactions on the brand’s page. For example, a search for “black dress” shows options for cocktail, day, and evening dresses from over 100 brands, or users can refine the search with “sleeveless black cocktail dress.”
A sub-affiliate network supports both brands and affiliates (content creators, bloggers, influencers, website owners, etc.) in monetizing their online platforms (blogs, websites, social channels) on a cost-per-action (CPA) basis. Sub-affiliates are rewarded by the brand when they drive desired conversions, and the sub-affiliate network receives compensation from the brand. The network then shares a percentage of that compensation with the contributing sub-affiliate.
Technology partners (not to be confused with affiliate technology) present brands with a suite of technology solutions that can allow them to connect with consumers through all stages of their journey and lead to conversions. Brands can partner with various technology affiliates, including site and cart abandonment/remarketing, sector verification, and domain recovery/ISP redirect.
Affiliate technology plays a crucial role in connecting affiliates to an affiliate program. Through affiliate technology, it’s possible to track and measure performance of affiliate activity, and correctly pay the partners who are promoting your company. This technology is provided through an affiliate network or a software as a service (SaaS) platform.
Both affiliate networks and SaaS platforms act as an intermediary between affiliates and brands and are set up to handle the tracking and reporting of affiliates’ activities and automatically pay out commissions to affiliates based on the rules set by the brand.
A successful affiliate marketing partnership relies on teamwork, audience and goal alignment, and effective communication.
So, who are the key players in an affiliate marketing model and how do they work together to create a successful partnership?
At the core are the brands or merchants, offering products or services to promote. Affiliates, such as bloggers, content creators, social media influencers, and website owners, partner with the brands to promote their offerings to their respective audiences.
Affiliate technology platforms act as intermediaries, providing a platform where brands can connect with a wide range of affiliates. They offer solutions for tracking, reporting, and commission payments.
Overseeing and managing the day-to-day operations and strategy of a program on behalf of brands is where affiliate program management agencies can come into play. They work directly with affiliates and the affiliate network or SaaS platform that services the technological needs of the program.
Finally, the consumers play a crucial role as they engage with the affiliates’ promotional content and make purchases, completing the conversion cycle.
This collaborative network ensures that each player benefits from the system, leading to a win-win situation for all parties involved.
A common mistake affiliate programs fall into is being overly reliant on just a handful of affiliates. Proactively working to diversify your affiliate marketing strategy and partnerships is a great way to maintain your competitive edge amid a crowded market.
A diverse affiliate portfolio can bring many benefits to your brand, including alleviating risk, growing audience reach, and accelerating program growth. To create a winning partner strategy, it’s important to consider leveraging a diverse mix of partners.
A diverse partner portfolio can bridge the gap for brands wanting to reach new audiences while driving incremental growth. These innovative partner types range from card-linked offer (CLO) affiliates to mobile networks to search/TM+ affiliates, and more.
Many companies, even ones with established affiliate marketing programs, often don’t realize just how many types of affiliate partners there are to work with and the immense potential they can offer, regardless of the industry or business model a company falls in.
Download our Ultimate Guide to Affiliate Partnerships to get a comprehensive look into the different partner types that exist.
To maximize success and return on investment (ROI) in affiliate marketing programs, it’s helpful to keep a few best practices and smart strategies in mind:
By following these guidelines, you can enhance your affiliate marketing program’s effectiveness and achieve long-term success and increased ROI.
When running or managing an affiliate marketing program, it’s crucial to be aware of potential pitfalls and avoid common mistakes.
By being proactive, transparent, and attentive to both affiliates’ and customers’ needs, you can steer clear of these pitfalls and create a thriving and sustainable affiliate marketing program.
Need more info? Download our full guide to overcoming the top challenges faced by today’s affiliate marketers for even more info on what you should keep in mind, and what to be aware of as you get your affiliate strategy underway.
Affiliate programs offer businesses breaking into new markets a pathway to swiftly gain visibility and credibility within the untapped target market. Leveraging affiliates’ customer bases and insights expedites brand recognition and builds consumer trust through recommendations.
This is especially crucial when your business is focused on breaking into new markets around the globe, since reaching global audiences can mean overcoming new challenges, speaking new languages (literally and figuratively), and understanding each audience’s unique needs and expectations.
Our team at Acceleration Partners specializes in global and regional management and has produced a library of content on the topic of entering and expanding into uncharted territory using strategic collaborations.
Affiliate marketing is a collaborative approach to achieving expansion domestically and abroad. These programs foster active brand promotion, accelerate market penetration, and provide a competitive advantage, all of which makes it an invaluable asset for entering new business arenas.
Affiliate marketing programs can boost in-store activity and sales by building a self-supporting bridge between online and offline customer engagement.
As affiliates promote a brand’s products or services through their online channels, the reach extends to potential customers who might not have otherwise discovered the brand. This expanded online visibility often translates into increased foot traffic to physical stores, driven by the curiosity sparked by online recommendations and promotions.
On top of that, affiliates can employ techniques like personalized discount codes or QR codes to seamlessly guide online audiences to brick-and-mortar locations, incentivizing in-store visits.
By tracking these interactions, businesses can quantify the impact of affiliate efforts on in-store conversions, enabling them to optimize strategies for both online and offline success. Thus, affiliate marketing programs serve as a conduit that converts digital engagement into tangible in-store activity and sales.
Affiliate programs excel not only in attracting new customers but also in retaining and engaging existing ones.
By teaming up with affiliates appealing to the same audience, businesses can provide tailored incentives, fostering loyalty and trust. The social proof from affiliate endorsements reinforces confidence, while ongoing enticing offers maintain customer interest, driving repeat engagement and purchases.
This synergy ensures affiliate programs’ effectiveness in cultivating lasting customer relationships and maximizing their value over time.
Boosting your SEO is a long-term exercise, and there are multiple big-picture approaches that a business can take to maximize their visibility in search results for some of their most important keywords and topics.
When it comes to affiliate marketing’s impact on SEO, however, things aren’t quite that simple.
There’s a big myth in the marketing world that affiliate marketing will negatively impact SEO, especially when it comes to backlinks (or links pointing from affiliate sites to your website) from affiliates with whom you have a financial relationship.
That’s why Google specifically recommends a few important best practices that can impact this, especially when it comes to disclosing that financial incentive: link markup. By tagging the links with a “sponsored” attribute or with a “nofollow” tag, you can make it perfectly clear to Google that those are affiliate links, and therefore your site should not be penalized for including them.
However, in some cases backlinks from reputable sources may have a positive impact on your SEO – but only if those links are trusted, deployed correctly, and any financial partnerships are properly disclosed.
To those on the outside, the inner workings of affiliate marketing can be mysterious and confusing. Some marketers even think it’s a channel that you can turn on and off, like you can with paid search or paid social (spoiler: it’s not).
While affiliate partnerships are multifaceted, it’s a structure that’s built on transparency and real relationships, not one-off transactions.
The overall goal of an affiliate program is to create a win-win framework for both brands and their affiliate partners – a structure that, when established properly and strategically managed, can make up a significant portion of a brand’s online revenue, with high return on ad spend (ROAS) and low cost-per-action (CPA).
Here’s one example of a sale generated through affiliate marketing:
The concept of leveraging affiliates to promote products or services to a wider audience has consistently demonstrated tangible results like this. Brands that carefully select affiliates aligned with their target market often see increased visibility, customer engagement, and sales.
However, the effectiveness of affiliate marketing depends on factors like proper affiliate management, product quality, and market relevance. When executed strategically, affiliate marketing can yield substantial benefits, making it a viable and valuable approach for businesses seeking to expand their reach and drive growth.
This case study, for instance, provides an excellent example. Reebok was facing a drop in orders, and sought help from Acceleration Partners. Through a successful media campaign in partnership with Cartera, a loyalty affiliate, Reebok saw a 161% increase in revenue and a 329% increase in clicks YoY. This campaign not only attracted new customers but also substantially boosted new customer spending and average order value.
Starting and running an effective affiliate marketing program can feel like a full-time job. For agencies like ours, it very much is. That’s why many businesses chose to seek out help from expert agency partners to make sure they’re providing the focus that a comprehensive, multi-faceted affiliate strategy demands.
The support of an agency that specializes in building these programs can strengthen an in-house team seeking to launch and grow an affiliate program. Here are a few of the steps we recommend to get started with an affiliate agency partner:
To effectively analyze, showcase, and report on the progress of affiliate marketing campaigns requires a combination of technical tools.
Affiliate tracking tools to monitor key metrics like clicks, conversions, and sales generated by each affiliate. This data provides valuable insights into individual performance.
To visually showcase progress, create dashboards or reports that offer a clear overview of campaign results. Regularly share these reports with affiliates to maintain transparency and motivate them to optimize their efforts.
When reporting, focus on key performance indicators (KPIs) that align with your campaign goals, such as revenue generated, conversion rates, and average order value.
At the end of the day, affiliate technologies (networks or SaaS) are only really responsible for the truly detailed tracking. It’s still critical to have an agency partner (like Acceleration Partners) who can take it one step farther and apply strategy to those results, so you can continue to refine and optimize your affiliate strategy intelligently moving forward.
A/B testing is another effective tool in affiliate marketing program optimization. Through controlled experiments, brands can better grasp what appeals to their target audience and then fine-tune their marketing strategies based on these insights.
Tracking, testing, and custom reporting allows you to highlight both individual and overall campaign successes (and areas for improvement), which reinforces a collaborative and productive affiliate relationship.
Take your affiliate marketing program to the next level. Connect with our team and we can help you explore bold new opportunities to make a real splash with your affiliate marketing strategy.
