Affiliate marketing, if done right, is one of the most effective ways of making money online. It’s ideal for bloggers and website owners who are looking to complement their online income. As the world moves rapidly towards digitization in the wake of the global coronavirus pandemic, affiliate marketing offers a fantastic avenue for people who want to make money online.
There are quite a few affiliate programs that pay instantly, which makes them an attractive option for established marketers as well as people who are only just starting with affiliate marketing. However, before you decide to join an affiliate program, it’s important that you understand the basics of how affiliate marketing works, the challenges and the complexities, the revenue models, and other KPIs and metrics, such as the retention rate, conversions, and most importantly, ROI.
The Basics of Affiliate Marketing
Affiliate marketing involves promoting a product in lieu of a commission. Retailers or merchants work with an affiliate program and networks, whose affiliates then promote their products, and for every sale made, the affiliate earns a commission. The affiliate partner, which could be an influencer, a blog owner, or a website owner in a specific niche, receives a payout for each sale made through their promotion efforts.
However, not all affiliate programs primarily focus on sales. In some cases, they also reward their affiliate partners for leads generated, or for a specific number of sign-ups such as for a free trial option. Some even pay for the number of downloads of their apps, or if an affiliate partner brings more traffic to their website.
Over the past few years, affiliate marketing has grown exponentially. The commission fees offered by different affiliate programs serve as the major incentive, coaxing more and more marketers to join. Affiliate marketing usually involves four players:
The Merchant: In a hierarchical structure, the merchant is at the top. It is the company that manufactures or sells the product that affiliate partners have to promote. The merchant sets the commission rates and the payout structure in most cases with the affiliate network. While the merchant can manage this in-house, they usually outsource it to focus more on their core offering.
Affiliate Program: Most merchants do not manage the affiliate program on their own. Instead, they work with organizations that do it for them. The affiliate program or network is responsible for providing the underlying technology and the promotional materials that affiliate partners use to promote the products. The provision of a custom dashboard for affiliate marketers to track performance, releasing payments, and setting up cookies or unique IDs is all handled by the affiliate program or network.
Affiliate Marketers: The efforts of affiliate marketers are critical to the success of the program. These are the third parties responsible for promoting the products or services and receive a commission for their promotional endeavors. From promoting goods and services on their website or through social media channels, affiliate marketers can tap into several channels in order to promote the goods or services.
The Customers: Lastly, there are the customers. These are the people who buy the products as a direct result of the affiliate marketers’ promotional efforts. In most cases, the customers will probably never even know that they were referred by an affiliate.
While this is a fairly high-level and basic understanding of affiliate marketing, it’s important to know that there are quite a few moving parts. You may have heard of affiliate networks and the important role they play in helping affiliate marketers. Understanding how affiliate networks operate is critical to your success as an affiliate marketer.
Affiliate Networks – How They Work
An affiliate network is essentially an organization that multiple merchants outsource their affiliate program to. The affiliate network is an independent company that offers many products for affiliate marketers to promote and manages the entire process, from onboarding affiliates to providing the affiliate platform that tracks everything as well as managing payments and more. On the other hand, an affiliate program is dedicated to a single merchant, which can be owned or managed by the merchant or outsourced, but essentially the program only offers the products of a single merchant.
One of the best examples of an affiliate network is ATraffic. With a robust team of highly experienced performance marketers behind it, ATraffic is an incredibly diverse network that focuses on several niches, including gambling, entertainment, finance, dating, health and wellness, lifestyle, and various other niches.
If you have a social media presence or a blog in any of these niches, you could join an affiliate network like ATraffic to refer and monetize your traffic. Obviously, it’s much easier said than done, but once you understand what your audience wants and provide them with products and services that will appeal to them, you will be able to start making money from them.
Understanding the Various Commission Models
As an affiliate, you want to be compensated for your marketing efforts and you may be tempted to join affiliate programs that pay instantly, meaning that you will get paid commissions daily, however, there are some considerations. In order for an affiliate program to pay instantly, they need to verify that the transactions are legit. While in most cases this is simple, there is a fair amount of risk for the affiliate program and merchant. The risks include returns, refunds, and chargebacks. What this means is that if they have already paid you a commission, they need to recoup their losses. While you may be tempted to say this is their problem and not yours, the affiliate network may implement certain strategies or policies to mitigate these losses. The steps they may take include deducting the commission they paid you from future payments, they may also pay lower commission amounts than if you were to be paid weekly or monthly. With some affiliates networks, they may only allow you to start getting paid instantly when you have some track record with them, and they can establish the quality of your traffic. You should also be aware that if you regularly have refunds or chargebacks, they could stop offering you instant commissions or potentially ban you from the network.
While joining affiliate programs that pay instantly may sound very attractive on the surface, it is vital to understand the terms and conditions and the risks involved. You should also be aware of any payment fees that can erode your commissions if you are being paid daily, as opposed to choosing to be paid weekly or monthly.
Before you join any affiliate network or program, it is vitally important that you understand the various commission models. Affiliate networks like ATraffic offer several commission models to their members, such as CPA, CPS, CPL, and Revenue Share models.
Cost-Per-Action (CPA) Model
CPA is one of the most commonly used commission models and is offered by a number of affiliate networks. Known also as cost per action, this earnings model pays the affiliate marketer whenever a specific action occurs. For instance, if the specified action is an app download, the affiliate program will pay whenever someone downloads the app through the affiliate link.
This model is quite prevalent in the affiliate marketing industry, primarily because it provides confirmation to the advertiser that they are paying for a tangible result. As a result, the risk is generally lower for advertisers as they have a clear idea about how much each action costs.
Cost-Per-Sale (CPS) Model
CPS is another incredibly popular commission model. As the name implies, you earn a commission when a sale is made. Think of it as a specific use case of the CPA model that focuses exclusively on sales. The reason why advertisers prefer this model is because they have acquired a new customer and they know exactly the cost of acquiring that customer. Each sale is tracked through unique links and tracking methods. The amount of commission you can earn will vary from product to product. CPS is usually a once-off payment. With that said, you should check the affiliate agreement to determine if you will receive commissions for any future purchases that your referral may make or is it only with their first purchase. Bear in mind that once your referral has made a purchase, the merchant then has their information and will continue to market and upsell to the customer directly, which means they can keep monetizing and extracting value from the customer.
Cost-per-Lead (CPL) Model
The cost-per-lead model is a conversion-centric pricing model that rewards affiliates for every signup or registration that they generate for the advertiser or merchant. The main difference between the CPS and CPL models is that the publisher gets paid for a sign-up, which is often just the email address or could be the contact details of an interested party.
This is one of the most effective methods of lead generation strategies that businesses use to build email lists and find interested consumers. If a lead has already expressed interest in your products, it’s much easier to convert them. The information received through the publisher’s efforts is used by the advertiser to later sell their products or services, either via direct calls or through email marketing. However, because the advertiser or merchant still has to make an effort to convert the lead into a sale, the payout is generally less than the CPS model. The risk is low for affiliate marketers because they just have to focus on generating leads i.e., it’s a low risk, low reward strategy. To make decent-sized commissions with CPL, you will need to generate large volumes of leads.
Revenue Share Model
The revenue share model, also commonly known as Revshare, is a performance-focused pricing model. Essentially, advertisers share revenue with the publishers for each conversion or sale that they bring. Depending on the value of the sale, the advertiser will give a percentage commission from the total value of the sale.
Since the advent of affiliate marketing, the revenue share model has been used by affiliate networks because it guarantees payouts based on tangible results. For advertisers, evaluating their return on ad spend is critically important. This model is ideal for affiliates that want to generate high levels of commissions. With many affiliate programs, the revenue share may be ongoing, which means every time an initial consumer that you referred renews their subscription or makes another purchase, you will receive a percentage of the sale.
Obviously, this is not as simple as generating a lead or clicks for the advertiser. But the financial reward is considerably higher. As you can imagine, this model is generally suitable for skilled affiliate marketers. For example, if you are a part of a revenue share scheme that pays 20% commission, and generate a sale of $100, you will receive $20 as commission. Depending on the program, in the case your initial acquisition makes a purchase in the future, you will also receive 20% of the value of their purchase. Potentially, this could prove to be a much better model than earning a flat fee commission.
The Bottom Line
Choosing an affiliate program that pays instantly might sound attractive especially if you want to generate cash flow but there are disadvantages that must be taken into consideration. If you are okay with weekly or monthly payments, then there are benefits to this.
Affiliate marketing is not as easy as most people think. You can’t just throw up some links and generate an income on the side. it requires meticulous planning and a careful understanding of your audience. Even small things like cloaking your links or writing good copy could have a major impact on your click-through rate (CTR).
It requires publishers to explore multiple traffic generation sources, from optimizing their websites for organic SEO to creating a comprehensive nurturing campaign. You have to balance your costs with the potential revenue that you stand to generate, and then create a marketing strategy.
Above all, you have to track how your marketing efforts are doing. Thankfully, most reputable affiliate networks like ATraffic provide members with access to detailed reporting through which they can track important metrics. They also get access to a range of promotional materials for optimizing their promotional campaigns using the brand’s assets. ATraffic is a fantastic choice for affiliate marketers that want to promote a range of products and services and earn decent commissions.