Affiliate Marketing 101: Overview of Affiliates & Technology Partners

Kristen IndiharSeptember 6, 2021

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Affiliate marketing has been on the rise over the last five years, and we don’t see that changing anytime soon.

According to Media Kix, an estimated 80% of brands have affiliate programs, and affiliate marketing spending will continue to grow over 10% in the upcoming years.

What is Affiliate Marketing?

Affiliate marketing is defined as promoting a retailer’s product or service in exchange for commission. Simple right? Due to its popularity, performance marketing has flourished into a much more complex concept.

Once you gain a good understanding of affiliate marketing, you’ll be able to leverage all of your options to make the best decision for your business.

Three Key Players in Affiliate Marketing

To understand affiliate marketing, it’s important to understand the players involved in affiliate relationships:

Advertiser

Advertisers are the people who own the product being sold and decide who they want to work with to grow their business; they can also be referred to as merchants or retailers.

Publisher

Publishers promote the advertiser’s product. This could be on their website, social media, or blog post. Publishers are paid a commission once a shopper converts because of their affiliate efforts. Publishers are also referred to as affiliates or partners.

Consumer

Consumers buy your product or service and make the affiliate world go round. Without consumers, also referred to as the customer or buyer, there would be no affiliate programs.

The Benefits of Affiliate Marketing Programs

So why do we need affiliate marketing? You can think of it like networking. The more people you know, the more business opportunities you’ll encounter. In affiliate terms, the more people you have promoting your products or services, the more likely you’ll get the sale. It’s usually low risk, and a fast way to get the results you want.

Once an advertiser and publisher decide to work together, they will determine a commission that the publisher will receive once they contribute to a sale. This could be a flat fee or percentage, and varies depending on the type of publisher the advertiser is working with. The advertiser then gives the publisher a unique tracking code so they know when to pay out commission.

Common Types of Affiliate Partners

Throughout the years the types of affiliate partners have multiplied, but here are four common partners you’re likely to come across. It’s important to note not all types of affiliate partnerships are right for every brand, so learning about your options is a great way to decide what will work for you.

Loyalty or Cashback

After making a purchase, shoppers receive money back or points based on what they bought through affiliate links. Then, the cashback or loyalty site will earn a commission for each sale.

Coupon Sites

Coupon sites promote discounts for brands by creating a special coupon code. The coupon site will earn money from the retailer when the purchase is complete with the coupon code or offer.

Content

Content affiliates, such as bloggers and influencers, are a newer yet popular addition to affiliate marketing. Bloggers can place banners or links in their blogs for advertisers. Influencers promote a product with photos or videos on their social media. They have a special code shoppers use so the advertiser can attribute the sale to the influencer and pay them commission.

Review Sites

Review sites contain a list of products being reviewed and compared, and a handful of them will be affiliate products. Potential consumers will go to these sites to gain insight on the products before they purchase.

In-House vs. Services

You may be thinking, should I hire an agency or network for this or can I handle it myself? There’s no right or wrong answer, and it is ultimately a personal business decision. It all comes down to the amount of involvement you want, and the amount you’re willing to pay.

So let’s break down the differences:

In-House

Affiliate Programs can be set up by a company in-house and work directly with the other partners involved. They cut out the middleman to reduce cost, but this requires more work to manage the affiliate relationships.

Network

Networks help with communication, billing, and maintaining the relationship between the publisher and the advertiser. They track data and analytics to ensure the relationships are successful. Networks also help review and find publisher options as they have a large platform of companies to connect you with. This helps minimize responsibility for the advertiser.

Agency

Agencies often manage your affiliate program along with some of your other digital marketing efforts, such as paid search or social. This means they’ll have all of your analytics in one place, and can take some pressure off if you don’t have enough marketing capabilities in-house.

SaaS

SaaS (Software-as-a-Service) companies provide the technology needed for your affiliate efforts, but they don’t manage the program or help the advertiser find publishers. They provide the tracking capabilities you need along with a marketplace to connect with brands.