Often, you’ll hear affiliate marketing touted as a way to make money in your sleep. That’s because once the affiliate sets up a campaign, it can generate passive income for months and even years to come. For businesses, it’s a low-maintenance way to reach potential customers and increase sales.
That sounds like a win-win. But how exactly does it work? This post will cover:
Affiliate marketing is an advertising model that uses third-party publishers to generate traffic to the seller’s website and drive sales through affiliate links.
For example, say you’re reading a review of the best coffee grinders for 2022. You see a disclaimer at the top of the article that says the publication might make a commission if you purchase a product using a link from the article. That’s affiliate marketing at work.
According to a survey by Forrester, more than 80% of brands and 84% of publishers use affiliate marketing. Why? For sellers, it’s an effective way to reach new, qualified leads and drive conversions. And for publishers, it’s a relatively easy way to generate income from content.
Customers also trust recommendations from their favorite publishers and content creators. In fact, one study found that 92% of people trust recommendations from other people, especially friends and family. Affiliate marketing leverages this trust.
Think of affiliate marketing as a form of word-of-mouth marketing. This model relies on affiliates to recommend a product or service to their audience, earning the affiliate a commission for each purchase.
There are 3 main players (and a bonus player) in affiliate marketing:
The seller: This is the business that wants to sell its product or service via affiliate marketing.
The affiliate: This is the publisher or individual who promotes the seller’s products. Affiliates can be websites, bloggers, YouTubers, social media influencers, or other content creators.
The consumer: This is the individual whose purchases make affiliate marketing work for everyone involved. The consumer is a crucial part of the model.
The affiliate network (bonus player): This is the easiest way for sellers and affiliates to find each other and work together. Not all affiliate marketers use networks, but it can be a great place to start for those new to this type of advertising. Some of the most popular networks include Amazon Associates, eBay Partner Network, Etsy Affiliate Program, and Elementor Affiliate Program.
In the simplest terms, the process typically works like this: The seller partners with an affiliate to promote a product using an affiliate link. Next, the affiliate includes this link within their content, such as a blog post. Then, the consumer clicks the affiliate link in the content and purchases the product or service through that affiliate link. Lastly, the affiliate earns a commission for the sale.
In practice, this could look several different ways. For example, you might receive a weekly newsletter with product reviews containing affiliate links. Or, you might watch a YouTube video where a makeup artist recommends a variety of products and includes affiliate links in the description.
You can use most digital platforms for affiliate marketing. These are some of the most popular.
Blogs: Bloggers are ideal candidates for affiliate marketing. They typically focus on a specific niche, are experts (or on their way to becoming experts) in their topic, and often look to monetize their content.
Product review websites: Websites dedicated entirely to product reviews and recommendations, like Wirecutter, are another no-brainer for affiliate marketing. Readers tend to trust these sites thanks to the rigorous testing processes.
Social media: Social media platforms may be commonplace for affiliate marketing, but it’s not the same as influencer marketing. The main difference is how content creators get paid. Influencer marketing typically involves compensation with a flat fee, free products, or both, while affiliate marketing is just commission-based. Another major difference is how affiliates measure and track success. While influencer marketing often focuses on reach, engagement, and impressions, affiliate marketing focuses on conversions.
YouTube: YouTube is one of the best places to discover the wide range of niches sellers can access. Whether it’s cooking, gaming, gardening, woodworking, competitive spreadsheet making, or anything else imaginable, you can find a YouTube channel for it. This makes it a great platform for sellers to find potential affiliates.
Pay-per-click (PPC) ads: PPC ads don’t require the affiliate to test or review the product or even know the product they promote. Affiliates can simply opt into a program, like Google AdSense, to have PPC ads displayed on their website, videos, or other content. The ads are typically tailored to the affiliate’s audience to ensure relevance to the consumers.
Email newsletters: Email newsletters, leveraged by blogs and product review websites, reach audiences right in their inbox with tailored recommendations. As we’ll discuss below, email is one of the best ways to convert on affiliate links.
How much the affiliate makes varies widely depending on their niche and the affiliate network they use. For example, Amazon’s affiliate program offers commissions ranging from 1% to 20%. There are a few different payment models:
Per sale: The affiliate gets paid for each purchase made through the affiliate link.
Per lead: The affiliate gets paid for each customer who signs up for something, such as a newsletter, that moves them further down the sales funnel.
Per click: The affiliate gets paid for each click to the seller’s website, helping increase their traffic.
Per action: The affiliate gets paid for each customer who performs a specific action, like a contact request or form submission.
Per install: The affiliate gets paid for each installation of software or an application.
As the name suggests, this type of affiliate marketing doesn’t require the affiliate to have any attachment to or knowledge of the product. The most common example is PPC ads on the affiliate’s website or platform.
In this type of marketing, the affiliate doesn’t make any claims about the quality of the product or service. It’s simply advertised alongside their content. This is the easiest type to set up, but it doesn’t have some of the advantages of more dedicated campaigns.
With this type of affiliate marketing, the affiliate promotes products related to their content niche. For example, a food blogger promotes kitchen equipment. Or, a fitness YouTuber promotes protein supplements.
The affiliate leverages their authority in the field to promote products that would appeal to their audience. However, the affiliate makes no claims about their personal use of the product.
Aptly named, this is the most involved type of affiliate marketing because it requires the affiliate to use the product or service and essentially vouch for it. Like in related affiliate marketing, affiliates promote products that fit within their content niche. But the affiliate goes a step further here, getting to know the product to make a personal recommendation.
Because affiliates need to build credibility with their audience, this type of marketing can take longer to pay off. However, it tends to have the best results because it leverages the trust audiences put in the affiliate.
While there are many different platforms for affiliate marketers to explore, email is one of the most effective. Here are a few reasons why:
Email has a return on investment of$36 for every $1 spent, making it one of the most profitable digital marketing channels.
Email subscribers have to opt into an email program, so you already know they’re interested in the content you have to offer.
Email allows you to segment audiences by interest and deliver content and recommendations for each niche. This means your affiliate links reach highly qualified leads likely to convert.
Email service providers (ESPs) offer valuable data insights into your campaigns’ performance and can use these insights to refine your affiliate marketing campaigns and improve your opens and click-through rates.
There are 2 main ways to incorporate affiliate marketing into email campaigns:
Add affiliate links to your existing email sequence: Already sending out weekly newsletters with product recommendations? This is a great place to include affiliate links where appropriate. Just don’t forget to add a disclosure about your affiliate links, which we’ll discuss in more detail below.
Create specific emails for affiliate campaigns: If affiliate links don’t fit within your existing email sequence, you can create a separate campaign that would make more sense, such as a newsletter dedicated to product reviews or deals. Just make sure the primary focus of each campaign is to provide valuable content to your subscribers, not just to promote your affiliate links.
Your affiliate campaigns won’t perform well if you send offers and recommendations to recipients who aren’t interested. As you grow your email list, make sure you segment it so that subscribers only get the emails that interest them. You can do this by asking what types of emails they want to get when they subscribe, segmenting audiences by demographic data and behaviors, or mixing both.
Segmentation works especially well for affiliate marketing because subscribers can opt into receiving daily deals and sponsored recommendations, letting you know they’re receptive to this kind of content.
Subscribers are more likely to engage with (and click on links within) your emails if they feel like you understand their interests and preferences. To this end, use the data your subscribers provide to deliver personalized communications. This includes common tactics like using the subscriber’s name in the email and more sophisticated tactics like using dynamic content to display different products depending on the recipient’s demographic data.
You can also use personalization to send deals and promotions tailored to the recipients. For example, if you ask your recipients to provide their birthday when they subscribe to your email list, you can send a “treat yourself” birthday email with affiliate links to products they might like to purchase for themselves.
If your emails read like a long advertisement, you’ll probably see your unsubscribe rate climb. After all, customers are exposed to unwanted advertisements all day and don’t want their inboxes inundated with them as well. That’s why marketing emails have to find a balance between promotion and content that readers want.
Emails should, first and foremost, be valuable to the reader. Focus on providing optimized content that resonates with recipients first, then incorporate your affiliate links where there is a natural fit with the content.
Automated email campaigns help you build and nurture a relationship with subscribers and take little maintenance once you’ve set them up.
For example, you can set up a welcome series for subscribers to your outdoor gear review newsletter and include affiliate links to some of your top recommendations. This type of email helps drive the passive income that makes affiliate marketing attractive to publishers.
Regulatory agencies, like the Federal Trade Commission in the US, require affiliate marketers to disclose relationships with sellers. You’ll often see disclaimers along these lines at the top of an email or post:
Before you start including affiliate links in your emails, read up on your local disclosure guidelines and be sure to follow them to avoid fines or other repercussions for undisclosed affiliate marketing.
It’s also important to understand how your ESP treats affiliate links and how these affect deliverability. You can find this information in the ESP’s policy or terms of use page.
Some ESPs prohibit affiliate marketing in the sense of marketing for a third party without intending to maintain a relationship with subscribers. But ESPs are generally fine with affiliate links relevant to the email content—as long as the URLs aren’t denylisted (blocked for distributing harmful content) and the content doesn’t violate the acceptable use policy.
ESPs aim to avoid deliverability risks such as distributing potentially harmful URLs that would result in emails ending up in the spam folder. That’s why ESPs pay close attention to affiliate marketing, where third-party links are common. The best way for affiliate marketers to avoid these risks is to vet all affiliate links before adding them to emails and only use reputable ones.
Wirecutter is a trusted publisher because it’s transparent about its vetting process for product recommendations. This makes subscribers feel confident that the affiliate links will lead them to reputable, high-quality products.
Book Riot’s newsletter sign-up options lead to great audience segmentation. This means the recipients of this Book Deals newsletter are expressly interested in purchasing books and likely to convert using the affiliate links.
Outside Online knows that subscribers to its Gear Fix newsletter are here for gear reviews from experts above all else. That’s why its newsletter doesn’t include affiliate links within the body of the email but instead entices readers with fresh content. Once recipients click through to these articles, they’ll find affiliate links to the products mentioned.
Creating stellar content for your affiliate email campaigns takes time and hard work. But sending those emails should be simple.
Twilio SendGrid offers a streamlined email process with free email marketing templates, drag-and-drop design, and simple automation. Plus, we deliver your emails with an industry-leading 96% inboxing rate.
