Low Risk, High Return: The Benefits from Affiliate Advertising

Low Risk, High Return The Benefits from Affiliate Advertising

Every business owner, manager or entrepreneur knows how important marketing is to the growth of their business.

Luckily, the Internet has provided the business community many avenues for promotions, on top of the traditional strategies that we already know. One online marketing strategy that can be extremely helpful for small business owners, entrepreneurs and marketers are affiliate advertising.

The idea of affiliate advertising can be summed up in two key elements: business partnership between merchant and affiliate, and performance-based commission.

As a marketing strategy, affiliate advertising relies on the connection of a merchant (retailer of the product, service, or brand) and an affiliate (promoter, advertiser, or publisher) in this business partnership, with the former providing the brands, products, and services that the latter will advertise or promote through ads, banners, and links on various online platforms.

Once a web visitor clicks on the affiliate ad or link, the affiliate will receive an equivalent commission for each visit (pay-per-click), registration (pay-per-lead), or for every purchase (pay-per-sale), which illustrates the second element of affiliate advertising. It is performance-based because each conversion is accounted for–the more ads or links converted, the higher the commission is.

What’s great about affiliate advertising is that it’s mutually beneficial. The merchant gets to have his or her product promoted for potential sales, while the affiliate gets to earn as well. A win-win situation, right?

Let’s take a closer look at the pluses you can reap from this online marketing strategy:

More website traffic for merchants

The goal of affiliate links is to direct traffic from a third-party website to yours, and eventually convert the visit to a sale.

Hence, the more affiliate links there are on your product or brand, the higher the volume of web traffic you can expect coming to your site. This also means additional opportunities to close a transaction.

It also helps if your affiliate’s site has content that is relevant to what you are selling. According to the experts’ opinion from Online Essays Scholaradvisor, your affiliate website’s visitors would be more interested in your product, and would probably be more inclined to browse through your site and make a purchase because it is part of the demographic you are targeting to reach.

Wider Market Reach

One primary objective of marketing is to expand exposure, and you certainly would meet that objective through affiliate advertising.

By having affiliates promote your product or brand through their websites, it will reach an audience that is beyond your normal scope. It can go beyond your local community, and personal network and connections.

In fact, it also enables you to find new market bases in different countries, especially since the Internet is not geographically limiting. It also lessens the hassle of spending time and effort on finding new customer niches on the merchant’s part since the affiliate’s site can cover that.

Low Risk, Effective use of budget

With affiliate advertising, you have more control in the budget department.

Since the commission is performance-based, you only shell out money when conversions are made. Unlike when you pay for an advertisement, you are not sure of the return of investment you are going to get.

With this strategy, you know for sure that you are getting your money’s worth in affiliate advertising because you have the value for PPC, PPL, and PPS. This is also the reason why many marketers believe that affiliate advertising is a low-risk investment. Plus, being low-risk makes it an attractive tool for testing the new market and consumer bases.

Relevant data on consumer behavior and marketing tactics

Perhaps the ultimate takeaway you can get from affiliate advertising, aside from the conversion, is that you get data that can be used to analyze what worked for your product and what else you can improve.

Affiliate links can be tracked, and consequently, can give a background on consumers’ behavior, latest trends, and demands through click-through rates or views. You would also gain insight on which affiliates, and which marketing strategy used gave better and higher ROIs than the other.

Did links incorporated in text content converted more in sales than banner ads? From which affiliate website had the most number of conversions? Who are the audience of the website?

This way, you can assess your marketing strategy and can make better decisions to ensure efficiency, and gain best results.

Affiliate advertising is certainly not a breakthrough marketing and promotions tactic, but it is seen to be gaining traction. For a low-risk advertising strategy that can bring results, affiliate advertising is the way to go for startup entrepreneurs and small business owners.

Featured Image by Joe The Goat Farmer

Stacey Marone is a freelance writer and a social media marketer. She creates magnetic content optimized for search. In her free time, she also does volunteer work and organizes some activities for children. Her passions involve painting, reading, and writing. You can follow her on twitter.

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