Social media platforms are the go-to place for people looking to learn about side hustles. Just look on YouTube. Videos about affiliate marketing rack up thousands of views from users eager to learn about the magical world of passive income. 

But what is affiliate marketing? No, it’s not just another quick-rich-scheme. It’s a legitimate partnership between a business and content creators (also known as affiliates). These creators are sort of like freelance marketers who get paid for any sales they help make. 

Affiliate marketing programs can be lucrative for both sides, but it’s not as easy as passing out product codes to influencers. This guide takes an in-depth look at how this industry works, from payment models to legal considerations. 

What Is Affiliate Marketing? 

Your business probably already has an in-house marketing team (or at least a Facebook-savvy employee or two). Affiliate marketing allows you to grow your reach by partnering with outside content creators who promote your brand. 

The simplest affiliate programs have these three elements: 

1. The merchant who makes the products or services
2. Affiliate partners who advertise the merchant’s brand in exchange for a commission
3. Affiliate links to track when customers make a purchase based on the affiliate’s content (without them, you wouldn’t know how many sales your partners have made or how much to pay them)

Some businesses recruit all their partners themselves, but you can also join an affiliate network. These platforms connect you with publishers who already have experience in your industry, saving time. 

Partnering with affiliates can help you reach more potential customers without spending a fortune on ads or Facebook content. It’s also fairly low-risk on your part. If your affiliates don’t make any sales, you don’t pay them — it’s as simple as that. 

How Does Affiliate Marketing Work?

It all starts with recruiting trustworthy partners and agreeing on a commission. 

You’ll teach these partners all the affiliate marketing basics, such as how to represent your brand and search engine optimization (SEO) techniques. You might also give them access to marketing tools, like email templates with your logo and high-quality product photos. 

The publishers research your target audience and develop content that appeals to them. For example, they might write blog posts with camping tips and spotlight affiliate products. Or they could film themselves using the items and share the videos on social media. 

When publishers make solid content, customers will eventually click the affiliate links and make purchases. You pay commissions for affiliate sales or leads. 

Types of Affiliate Marketing

Affiliate marketing involves more than adding random links to online content. There are several approaches with different benefits and drawbacks, including: 

Unattached Affiliate Marketing

Some affiliates promote products that they’ve never even seen in person. For example, they may run pay-per-click (PPC) advertising campaigns through Google Ads for a tire company’s products. When people click the ads and buy something, the affiliate gets a payout. 

Many creators love this type of digital marketing because it doesn’t require any special knowledge. An affiliate could promote software, dog food, and automotive services at the same time. Plus, there’s no need to build a long-term audience or even interact with customers. The affiliates just buy the ads, design them with their affiliate links, and move on. 

However, this approach can be pricey in the long run because it requires a steady stream of paid ads. 

Related Affiliate Marketing

Some affiliates have built businesses or websites in a specific niche and have decided to promote relevant products. However, the marketers often haven’t used the items themselves.

This method works best when the affiliates have built trust with their audiences. For example, they might write blog posts about how to maintain a Subaru. They can sprinkle affiliate products — such as a car care kit or high-tech windshield wipers — throughout this content. 

Related affiliate marketing does pose a few risks for the publishers, though. Since they have no personal experience with the affiliate products, they could unintentionally promote something harmful — like a car sponge that leaves scratches all over the paint. That’s a fast track to a damaged reputation, so affiliates should pick merchants carefully. 

Involved Affiliate Marketing 

The most desirable marketers — for businesses and audiences — only recommend products that they’ve personally used and loved. They typically promote these items through organic content, not paid ads. 

An involved approach takes more time because the influencers must slowly build their credibility. However, this type of online affiliate marketing can be incredibly effective because it’s more authentic and earnest. 

Compensation Models in Affiliate Marketing

At this point, you might be asking, “What is an affiliate program going to cost me?” It really depends on your conversion rates and the compensation model you choose. 

Here are a few popular payment structures: 

• Pay-per-sale model: Affiliates earn money every time customers make a purchase with their links. 
• Pay-per-lead model: Publishers get rewarded when leads complete specific actions, such as joining email lists or sharing their contact details. 
• Pay-per-click model: Every click on an affiliate link leads to a commission, even if the user doesn’t buy anything. 

Strategies for Success

Building an affiliate marketing program takes careful planning. These best practices will help you get the most out of this method: 

• Make sure your payouts are competitive. Publishers might genuinely love your brand, but they’ll probably go with a more generous company if you’re only offering tiny commissions. 
• Create communication channels so affiliates aren’t left stranded. Always have a designated contact person, and consider sending regular newsletters with updates. 
• Help your affiliates succeed by sharing resources, such as quarterly guides to the latest digital marketing trends. More knowledge equals better performance. 
• Encourage your partners to use SEO tactics, such as adding relevant keywords and using professional photos. 

Many companies create onboarding programs to get affiliate partners up to speed quickly. 

Legal Considerations

The Federal Trade Commission has strict requirements for affiliate marketers. For example, they must disclose when they’re getting paid to endorse a product. 

Failure to follow these rules can lead to stiff penalties for the affiliate and the merchant, so make sure everyone is educated. 

Examples of Successful Affiliate Marketing Programs

BarkBox’s Affiliate & Creator Program allows partners to earn commissions for promoting its pet products. For example, affiliates earn an $18 commission every time someone uses their link to sign up for the monthly BarkBox subscription. The company supports its partners with weekly newsletters and other resources. 

Meanwhile, Tripadvisor’s Affiliate Program uses a PPC model. Affiliates can earn a 50% commission or more when clients click on the company’s hotel booking partners — no reservation required. 

Kickstarting Your Affiliate Marketing Efforts 

Collaborating with affiliates is like having an army of freelance marketers on your team. It’s also more cost-effective than hiring more in-house marketers — no salaries, no benefits, just purely performance-based commissions. 

Of course, building a successful program isn’t as easy as asking influencers to copy and paste affiliate links everywhere. You need the right onboarding plan and resources. 

At Optimize Digital Marketing, we’ve got the expertise you need to launch or grow your affiliate marketing program. Schedule a free consultation to learn more! 

FAQs



What exactly does an affiliate marketer do?

Affiliates are essentially freelance marketers, just without the contract. They earn payouts for marketing another company’s offerings. 

What is an example of affiliate marketing?

REI partners with publishers to promote its outdoor products. Affiliates can earn commissions on sales, new memberships, and more. 

How to start affiliate marketing?

Make a list of companies you already love — your favorite dog food brand, beloved sneakers company, and so on — and see if they have affiliate programs. Or join Impact, Rakuten Advertising, and other networks. 

How much does it cost to start affiliate marketing?

As a publisher, you can start affiliate marketing for free — assuming you already have a smartphone, that is. Just start marking organic content to share on social media. For businesses, it may cost $500 to $2,000 to develop an onboarding program and start recruiting affiliates.