What is Affiliate Marketing and how does it work?
I’m pretty sure you’ve heard of affiliate marketing, but haven’t fully understood how it works, how
people make money with it, and more generally what affiliate marketing is. In a very reduced, succinct and short definition, affiliate marketing is a marketing business model where your customers and/or readers become your salespeople.
What is affiliate marketing in 2022 ?
Affiliate marketing is a sales model in which a business pays a commission to an individual or other
business called an « affiliate » to promote its products or services. Simply put, an affiliate acts as a representative or intermediary of the business they are associated with, helping them to make sales in exchange for a reward.
Better understand the actors of affiliation
It should be understood that the concept of affiliate marketing works through three main players : affiliates, sellers and consumers.
- The affiliate (prescriber): opinion leader, influencer or quite simply ambassador, the affiliate becomes a
prescriber of the service or product that he promotes via his own media (blog, social networks, etc.). He
makes his recommendations to his audience and is paid a commission on each of the sales he generates.
- The seller (e-merchant – advertiser): the seller offers a product or service for sale. It allows a partner
(here, the affiliate), to promote its products and services. This exchange is generally done via an affiliate
platform or directly via the seller’s affiliate program. With each sale, the e-merchant pays a commission
to the affiliate.
- The consumer (buyer): the end buyer relies on the recommendations of his favorite opinion leaders and
influencers and is authoritative of the latter’s prescriptions. The consumer uses the link provided by the
affiliate and purchases the recommended product or service. This generates a sale with the affiliate who
himself generates a commission with the seller.
As an e-merchant, it is therefore possible for you to offer an affiliate program with the aim of recruiting
affiliates who will, over time, become a solid network of partners. Remember, however, that as an entrepreneur it is also entirely possible for you to become an affiliate yourself ! If you have the necessary network, it is actually possible for you too.
How does affiliate marketing works ?
The whole concept behind affiliate marketing is based on revenue sharing. In this business model, where everyone is a winner, a company that has a product or service to offer offers a reward to promoters affiliates in order to give visibility to their offer and to advise it to others.
In case the affiliates are successful in their marketing efforts, the company rewards them with a share of
the profits. Affiliates have the option of signing up for different affiliate programs, and as a result, earning
commissions through each of them. This is what makes this type of marketing successful. The affiliate can thus promote products and services from different companies, unlike a « classic » seller.
Affiliate marketing is based on a fairly simple mechanism to understand. Initially, a company or a platform specializing in affiliate marketing that markets a product or service creates an affiliate program and determines a type and rate of commission for this same program. A unique link is then provided to each affiliate so that they can monitor the number of sales made. If someone clicks on this link on the affiliate’s blog, website or social media, a cookie is stored on their device.
The purpose of this « affiliate cookie » is two fold: it first allows the company to associate the sale with the
right affiliate, and it is also the means for the affiliate to be paid, even in the case in which the interested
person who clicked on the link delays his purchase. Here’s why. Surely you have already seen Youtubers displaying affiliate links, for example for a VPN brand. You have clicked on the link to see the offer and a cookie is stored on your computer. But in the end, you did not complete the purchase at that precise moment, for a particular reason. A few days later, you go to the website of this VPN brand and finally buy the product. The affiliate will still receive their commission, thanks to the cookie duration policy of 2, 3 days, or more, guaranteed by the brand.