What Is Affiliate Marketing And How Does It Work?

Digital ad platforms such as Facebook and Google are becoming more and more crowded with deep-pocketed competition. The costs of advertising online are becoming increasingly expensive, and don’t we (and you) know it?!

An increasing number of companies are exploring digital marketing every day. This is because the advantages of digital marketing are many, with the key ones being planning, targeting, budgeting and attribution.

For example, when you’re running a Facebook Ad, you can see exactly how much money it costs you per click, signup or sale (if your Facebook Pixel or Google Analytics is set up correctly, that is). As a result of more companies advertising, costs are growing.  This is simple supply and demand stuff. That’s why it is crucial that businesses today find different and more cost-effective ways to grow. 

One of the best alternative marketing experiments we’ve seen so far is setting up an Affiliate Marketing program.

Give us a shout if you need experts to set up your analytics or affiliate marketing program.

 

What is Affiliate Marketing?

What does wiki say?

According to Wikipedia, this is the definition of Affiliate Marketing is:

“Affiliate marketing is a type of performance-based advertising in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.”

What do we say?

In other words, affiliate marketing is similar to referral schemes but more focused towards marketing pro’s, not the general public.

These marketing professionals have their own unique sales technique and get paid on commission only. So if the affiliate marketers don’t manage to sell the product or service in question, they don’t get paid. Affiliate marketing is great for companies in that way as it is usually completely risk-free.

 

How Does Affiliate Marketing Work?

So, we now know that affiliate marketing allows individuals to help grow your business for a share of the profits. Companies that use them, usually have a section of their website dedicated to the affiliate setup and how it works.

On the page dedicated to their affiliate marketing program, the call to action can be a simple “contact us to apply” button that captures applicants’ emails.

Alternatively, it could be a form that automatically signs up affiliate marketers as users of the program, and that automatically generates a UTM tracking link.

 

Tracking activity

A UTM tracking link is a link that is unique to every affiliate user and tracks the number of clicks, signups or sales (and more) that goes through it.

This will enable you to have visibility on the performance of your affiliate marketing efforts and it’s also how you can create dashboards for affiliate marketers to track their performance.

 

Example of a successful affiliate program

Alex the legend

Yours truly, Alex Colas (The Growth Hustlers’ other French Growth Hacker) set up this affiliate marketing program. After a slow first few weeks, it started to explode in the last few months and now accounts for 20% of the business.

 

Google Data Studio chart showing the sales coming from affiliates (purple):

The marketing costs are also hugely reduced, with a CPA (Cost Per Acquisition) that is 10 times cheaper than the second-best channel (The mad titan Google Ads).

A true work of growth hacking dark magic.

Hopefully, this article has managed to convince you to try affiliate marketing as part of your marketing strategy for 2019. If you need any tips or advice to set up your affiliate program, you know where to find us!

 

May Growth Be With You.

 

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Giovanni Perri

About Giovanni Perri

Giovanni is the co-founder of The Growth Hustlers. His years of experience in marketing – and growth marketing in particular – have helped many businesses find and accelerate growth using his data-driven approach.

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